New Zealand Energy Corp. (CVE:NZ)(OTCQX:NZERF) said Monday it had agreed with Origin Energy Resources to extend the deadline for meeting the financing condition for its deal to acquire three petroleum licenses and infrastructure from Origin by about a month, until September 30.
The parties also agreed to extend the government approval condition deadline from September 13 to October 14, with New Zealand Energy to increase the non-refundable deposit under the agreement from C$5 million to C$6 million as a result.
The $33.5 million acquisition, which includes the Tariki, Waihapa and Ngaere (NYSE:TWN) licenses, as well as the Waihapa production station and associated infrastructure, has been underway since last year, with the company moving one step closer to closing the deal earlier this month after entering a 50/50 split joint venture agreement with L&M Energy Limited to explore, develop and operate the assets it is about to acquire. The deal will see L&M invest $18.25 million, to be put toward the acquisition of the assets from Origin.
New Zealand Energy said last week that an "extensive post TWN acquisition work program" -- on which it will spend a total of $7.3 million this year -- will be conducted once the deal closes, to be made up of reactivation and re-completion of existing wells, in addition to up to eight new wells, including four targeting deeper, high impact targets.
The acquisition, which will no doubt add to its existing production portfolio in the Taranaki Basin, will give New Zealand Energy cash flow, infrastructure and inventory to support long-term growth. The Canadian junior oil and gas play already controls 2.2 million acres of exploration permits on New Zealand's North island (including one permit pending), where it is producing oil from four wells.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.